Check Point invests future in Next Generation

Check Point invests future in Next Generation

Internet security company Check Point Software Technologies announced Tuesday that its much-anticipated Check Point Next Generation software is available.

Check Point NG is the latest version of the company's VPN 1/Firewall 1 security software and is released at a time when the Internet security market is struggling to sustain its sales cycle and reinvigorate its sales channel.

Last month, Check Point preannounced earnings of $0.32 per share for the June quarter, with revenue in the $140-142 million range. Analysts had previously expected earnings of $0.30 per share and revenue of $152 million.

Given the current economic climate, the downgrade was not too much of a surprise. Enterprise customers remain cautious with respect to their future IT spending, including Internet security, a market with low penetration relative to other areas of software. The upcoming quarter will likely be challenging for all security players, considering the economic slowdown in the US and Europe. Such behavior will constrain average deal sizes.

Perhaps that is why at the launch in New York, Check Point emphasized NG's latest virtual private network capabilities. VPNs are substantially cheaper than firewall alternatives, and even larger companies are becoming increasingly sensitive to security costs. About two-thirds of Check Point's license revenue is generated from VPN sales.

Check Point founder, chairman and CEO Gil Shwed said the NG release will enable VPNs to go "mainstream" - Check Point-speak for getting its software into every branch office of its Fortune 2000 companies. If Shwed is correct when he claims VPNs are on average 80% cheaper than firewall alternatives, including total cost of ownership, then Check Point should be able to get its software accepted by Fortune 2000 companies.

Until now, the tasks of setting up, administering and optimizing VPNs have shown them to be unreliable, but Check Point's NG release solved these concerns, he said. The release includes 1,000 new features and five new module options.

To add further weight to the proceedings, the California company wheeled out its heavyweight partners, including Compaq, IBM, Nokia and Sun.

Check Point cofounder and senior vice president Marius Nacht said NG had been three years in development, with its rules-based security module scaled from over 300 rules to 68 for easier administration.

Check Point VP of worldwide marketing Carol Stone said highlights of Check Point NG include a graphical map for analyzing and managing a company's Internet security; centralized management for security software and licenses as well as security policies; the industry's first VPN with full auditing features; increased performance; one-click VPN client installation with full remote administration; personal firewall integration; corporate security policy enforcement; and configuration checking.

Check Point has redesigned its patented Stateful Inspection technology to enable computationally intensive operations, such as firewall, encryption, compression and public key operations, to be off-loaded to third-party hardware. Check Point is also making available to partners its "security acceleration solutions" - its SecureXL APIs - to integrate into their network processors and appliances.

Dan MacDonald, VP of Internet communications at Nokia, said NG's acceleration products will be included as part of its high-performance security appliance, which is to be released in the third quarter. MacDonald told the451 that the IP 740 fills a gap at the high end of the performance spectrum - designed for a high-end data center or carrier-class environment, it is capable of 1.5Gbps of secure firewall throughput. The IP 740 is Check Point's attempt to compete with Cisco and other appliance vendors.

Check Point also announced it has surpassed 100,000 VPN software installations and 83 million VPN clients. Datamonitor recently named Check Point worldwide VPN market leader with a 62% market share - nearly four times that of any other vendor.


the451 (www.the451.com) is an analyst firm that provides timely, detailed and independent analysis of news in technology, communications and media. To evaluate the service click here.

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